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"We conclude today that discrimination on the basis of sexual orientation is a form of sex discrimination," Judge Diane Wood wrote for the 7th Circuit Court of Appeals.

The ruling is a victory for Kimberly Hively, who sued Ivy Tech Community College, arguing that the school violated Title VII of the Civil Rights Act of 1964 when it denied her employment.

"Any discomfort, disapproval, or job decision based on the fact that the complainant -- woman or man -- dresses differently, speaks differently, or dates or marries a same-sex partner, is a reaction purely and simply based on sex," Wood wrote.

"That means that it falls within Title VII's prohibition against sex discrimination, if it affects employment in one of the specified ways," Wood added.

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"This decision is (a) game-changer for lesbian and gay employees facing discrimination in the workplace and sends a clear message to employers: it is against the law to discriminate on the basis of sexual orientation," said Greg Nevins of Lambda Legal, the group that brought the case.

Dissent: Sex and orientation are different

Judge Diane Sykes, a top contender for the Supreme Court under President Donald Trump, wrote the dissent for three members of the court, calling the majority opinion "momentous".

She said that if Hively was denied a job because of her sexual orientation, she was "treated unjustly."

"But Title VII does not provide a remedy for this kind of discrimination. The argument that it should must be addressed to Congress," Sykes wrote. She said that classifying people by sexual orientation is "different" than classifying them by sex.

"The two traits are categorically distinct and widely recognized as such," she said.

Next stop, Supreme Court?

"Federal anti-discrimination laws were always going to be the next battleground after the Supreme Court's gay marriage decision," said Steve Vladeck, professor of law at the University of Texas and CNN legal analyst. "And in some respect, these laws are even more important, because they also apply to private parties -- such as employers."

Tuesday's ruling conflicts with a different appellate court ruling -- in the 11th Circuit Court of Appeals -- from last month that found that Title VII does not bar claims of discrimination based on sexual orientation, possibly teeing the issue up for Supreme Court review.

CORRECTION: This story has been updated to correct the spelling of Greg Nevins' last name.